S&P: Tourism a vital growth driver for Philippine economy

MANILA, Philippines — The tourism comeback is expected to be a significant growth driver for the Philippines this year, according to S&P Global Market Intelligence.

In a report released yesterday, S&P Global Market Intelligence Asia-Pacific chief economist Rajiv Biswas said the easing of pandemic-induced travel restrictions last year has allowed a gradual reopening of both domestic and international tourism travel in the Philippines.

“This will provide an important boost to the economy in 2023,” he said.

From Jan. 1 to May 12 this year, international visitor arrivals in the country reached a total of two million.

Last year, international visitor arrivals in the country reached 2.65 million, generating P210 billion worth of tourism revenue.

Data from the Philippine Statistics Authority showed the tourism industry’s contribution to the gross domestic product (GDP) was at 6.2 percent last year, up from 5.2 percent in 2021.

Prior to the pandemic or in 2019, the tourism industry’s share to the country’s GDP was estimated at 12.7 percent, including both international and domestic tourism spending.

In that same year, international tourism spending was estimated at P549 billion, while domestic tourism spending was at P3.1 trillion.

“Due to the importance of domestic tourism in the overall contribution of tourism to GDP, the recovery of domestic tourism could be a significant growth driver in 2023,” Biswas said.

The government has set a six to seven percent economic growth goal for this year.

In the first quarter, the economy grew by 6.4 percent.

In the Asia-Pacific region, Biswas said international tourism flows have continued to recover in the first half of the year, as it benefited from the reopening of China’s international borders.

He said this recovery in international tourism in the Asia-Pacific region is expected to continue and reach pre-pandemic highs by next year.

In the medium-term, he said the region is poised to see a return to rapid growth in both domestic and international tourism visits.

“This will be driven by continued rapidly rising household incomes across the large emerging markets of the APAC region, notably in the most populous nations of mainland China, India, Indonesia, Philippines and Vietnam,” he said.